Dow's Q3 2025 Earnings Report (October 27, 2025)

The stock price has been depressed for a full year—falling two tiers. After the Q3 2025 earnings release, however, it surged 13%. Has there been any fundamental change? ・ First, revenue was weak: the Q2 guidance for this quarter stood at $10.2 billion. ・ Second, GAAP EPS turned positive only due to two non-recurring items; operating profit failed to cover interest expenses. ・ On the positive side, the loss was narrower than expected—the company’s cost-cutting and capital expenditure reduction initiatives have yielded results. Has the chemical industry reached an inflection point in its downturn? ・ On the supply side, Dow believes capacity restraint is now underway across all regions—including China: “We've got speculation on the closures of about 13 million metric tons—from a combination of additional capacity in Asia, Japan and Korea to the tune of about 5 million tons and China from the [anti-evolution] policies to the tune of about 7 million tons.” ・ On the demand side, Dow sees overall demand remaining weak—unchanged from last quarter. It hopes interest rate cuts will stimulate construction starts.

Loss of RMB 16.5 Billion! Global Chemical Giant Dow Releases Full-Year 2025 Results

As a global chemical giant, Dow Inc. recently released its financial results for the fourth quarter and full year of 2025. Core financial metrics were under broad pressure—exhibiting simultaneous year-on-year and quarter-on-quarter declines—highlighting the severe operational challenges facing the chemical industry during its current trough. To counter deteriorating performance, the company is advancing large-scale cost reductions and organizational transformation, aiming to break through via leaner operations and improved efficiency. Financial highlights show that Dow’s net sales for Q4 2025 totaled $9.5 billion—a 9% decline year-on-year—with all operating segments registering declines, reflecting broad-based pressure. Quarter-on-quarter, sales fell 5%, which the company attributed to normal seasonality, resulting in concurrent declines in local pricing and volumes. The dual drag of falling volumes and prices weighed heavily on revenue. Specifically, volumes declined 2% year-on-year—primarily driven by the shutdown of an ethylene cracker unit in Europe, the Middle East, Africa, and India (EMEAI), which directly reduced olefin volumes in that region. Volumes also fell 2% quarter-on-quarter, closely tied to seasonal softness in construction and building materials demand. Pricing was even weaker: local prices dropped 8% year-on-year and 3% quarter-on-quarter—further squeezing margins. Profitability pressures were even more acute. Under U.S. GAAP, Dow reported a net loss of $1.5 billion for Q4; operating EBIT stood at just $33 million—a sharp decline of $421 million year-on-year. The company cited falling product prices and lower production utilization rates as primary drivers of the profit slump. However, previously implemented cost-cutting measures partially offset the losses. Quarter-on-quarter, operating EBIT declined $147 million—mainly due to margin compression and seasonal demand weakness—though lower fixed costs provided some relief. Earnings per share (EPS) also deteriorated. GAAP EPS for Q4 was a loss of $2.15; operating EPS was a loss of $0.34. By comparison, operating EPS was $0.00 in the prior-year period and a loss of $0.19 in the prior quarter—indicating further widening of losses. Notably, operating EPS excludes $1.81 per share in major project-related charges—primarily impairments related to polyurethanes and construction chemicals businesses, plus non-cash pension settlement expenses. Cash flow also contracted significantly. Cash flow from continuing operations totaled $298 million for the quarter—a $513 million decline year-on-year, primarily driven by lower profitability. Quarter-on-quarter, it fell $832 million—largely because the prior quarter included substantial prepayments received under low-carbon solutions and other long-term supply agreements, creating a relatively high base. Despite the challenging results, Dow maintained shareholder returns, distributing $251 million to shareholders in the quarter—all in the form of dividends. For the full year, Dow’s 2025 performance likewise fell short of expectations. Full-year net sales amounted to $40 billion; GAAP net loss totaled $2.4 billion—versus a $1.2 billion net profit in 2024, marking a dramatic reversal. Operating EBIT plunged from $2.6 billion in 2024 to just $400 million in 2025—a steep decline. Cash flow from continuing operations totaled $1.1 billion—nearly halved from $2.9 billion in 2024.

Dow Inc. (DOW) Seasonal Returns Chart

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Dow Inc. released a seasonal returns chart showing average monthly price performance from 2019 to 2026, along with current stock data and a recently announced cash dividend.

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